The GST Council, headed by Finance Minister Nirmala Sitharaman, on Monday announced the formation of a Group of Ministers (GoM) to consider lowering the tax rate on life and health insurance. The GoM will also explore reducing the GST on cancer medications and ‘namkeens’ (selected snacks).
The Group of Ministers (GoM) focused on life and health insurance will be led by Bihar Deputy Chief Minister Samrat Choudhary, who is also currently leading the panel on GST rate rationalization.
During its 54th meeting, the GST Council reached a “broad consensus” on providing relief to individuals and senior citizens by revising the GST applied to health insurance premiums.
The current GST rate on health and life insurance policies is 18 percent. In addition to addressing this, the GST Council has announced a reduction in the GST rate on cancer drugs from 12 percent to 5 percent, and on namkeens from 18 percent to 12 percent. The Council also agreed to form a Group of Ministers (GoM) to review the compensation cess.
“The GST Council has agreed to form a GoM which will now take it up to study and decide on how to move forward on compensation of cess which will cease after March 2026,” said FM Sitharaman.
The total cess collection projected until March 2026 stands at Rs 8.66 lakh crore.
After settling the loan payments, a projected surplus of around Rs 40,000 crore is expected. Revenue Secretary Sanjay Malhotra said that the GST compensation cess may be discontinued post-debt repayments.
At a press conference after the meeting, Malhotra also said import of services by foreign airline companies will be exempt from GST.
Universities and research centres established by central or state government laws, or those granted income tax exemptions, will now be exempt from paying GST on research funding, said FM Sitharaman.
The GST panel also decid- ed to introduce business-to- customer (B2C) GST invoic- ing. This new system for GST invoice managell take effect from October 1.
It was also announced to surge
per cent to 28 per cent.